EDI, Supply Chain, and APIs: How do they work?
EDI, Supply Chain, and APIs all have a unique relationship across the electronics manufacturing industry. EDI software and APIs offer efficient methods of exchanging data between business partners, with the potential to transform business procedures throughout the supply chain.
Electronic Data Interchange, or EDI, is a standardized electronic format used by business partners to exchange documents electronically, rather than using paper forms. EDI provides an enterprise many benefits, as it eliminates the need for paper forms, mail, faxes, or other types of unsecured communications that are prone to error and misinterpretation.
Because there is no single set of EDI standards, and many different systems are available, but every partner within a supply chain must subscribe to and invest in the same system for communications to work.
APIs, or application program interfaces, on the other hand, work as translators between dissimilar information systems. With the correct API, two business partners with different systems can still participate in exchanging business documents with one another, as the API translates the information from one format or language to another.
Read more: What is EDI Software?
EDI offers the opportunity to improve business processes by:
- Streamlining processes,
- Reducing cycle times,
- Improving communication and customer service,
- Eliminating errors, and
- Saving resources, time, money
However, implementing an EDI program from scratch can present many challenges.
Supply Chain Challenges for EDI
1. Partner Integration
Not all EDI systems can communicate effectively with one another, so ensuring that your selected system is compatible with partner systems must be a primary consideration for an enterprise considering EDI. Once compatibility is assured, each company will have different requirements for testing and implementation.
2. Scaling
Even with compatible EDI systems, each partner will have unique requirements and inputs for similar documents. An invoice for one partner, for example, may require item number only, while the other requires store or warehouse location information. Business partners may encounter scalability issues with EDI in attempting to accommodate hundreds of unique business rules for different partners.
3. Affordability
EDI has traditionally been expensive to implement. The software itself is costly and companies that have an outdated system may be required to update equipment and reinforce their networks prior to EDI implementation. There may be additional charges for getting partner systems connected and data integrated, and ongoing maintenance and system updates.
4. Bad Data
A recent study found that up to 60% of business-to-business transactions were affected by bad data, including incorrect price, out-of-stock errors, and duplicate POs. Eliminating bad data throughout the supply chain is important for enterprises hoping to take full advantage of EDI systems.
APIs Can Help
While all issues associated with EDI implementation cannot be alleviated with APIs, mainly problems with data integrity, APIs do help companies to implement electronic communications with partners in the supply chain.
APIs are more affordable solutions than a full EDI system, as an API is a software solution that sits in and works with existing networks. An API helps to solve issues with partner integration and scalability because it can communicate with all different types of systems, translating incoming data to the enterprise format, and translating exported data to the supplier preferred format.
Read more: How Blockchain API Integration Impacts Electronics Manufacturing Professionals
Orbweaver alleviates transfer burdens and helps save time and money, while presenting an affordable and flexible alternative to EDI. The only data interchange solution created specifically for the electronics component industry, Orbweaver Connect provides companies with an API that can communicate with any partner system, allowing for streamlining of business processes throughout the supply chain.
To learn how Orbweaver Connect can provide all the benefits of EDI to you and your business partners, contact Orbweaver today.
